Health

Drugmaker fined $100M for hiking price 85,000%

An Irish drug maker was accused of slowly hiking the price of a life-saving medication used to treat infants from $40 a vial to more than $34,000 a vial, and preventing other pharmaceutical firms from creating a competitive drug. The company, Mallinckrodt, agreed Wednesday to settle charges of anti-competitive practices by paying a $100 million fine and allow a competitor to produce a similar medication. The Federal Trade Commission announced that the deal was reached with the FTC and three state attorney generals.

The drug, H.P. Acthar Gel, is used to treat infantile spasms and multiple sclerosis. A spokesperson for New York Attorney General Eric Schneiderman — who was involved in the settlement — said the drug is typically prescribed in “life-saving situations.” Schneiderman’s office said Mallinckrodt’s (MNK)U.S. subsidiary — formerly known as Questcor — purchased Acthar in 2001 and proceeded to slowly raise the price of the drug 85,000%. The complaint says a single course of treatment can cost “well over $100,000.”

The complaint also alleges that Questcor thwarted attempts by its competitors to introduce a similar drug to the U.S. market by out-bidding their efforts to acquire Synacthem, which is used to treat the same conditions, in 2013. Now, the company must give up its rights to Synacthem and allow another company to produce the product. “This is an egregious case of a monopolist doing a deal to eliminate potential competition and keep its power over pricing,” Schneiderman said in a statement. “This settlement will restore the competition that was prevented by Questcor’s illegal actions.”